Abstract:
A hierarchical optimization (or bilevel programming) problem consists of a decision maker called the leader who is interested in optimizing an objective function that involves with the decisions from another decision maker called the follower whose decisions are based in part on the policies made by the leader. However, if the planning horizon expands into an extended period of time, it may be unrealistic for either players to commit to the original decisions so there is a desire to break the problem into stages and the leader may wish to reevaluate the follower's response at each stage. In this article, we propose a multistage hierarchical optimization problem with the leader's objective consisting of multiple criteria and study the optimality conditions of such problems using an extremal principle of Mordukhovich.